A Review of the Nigerian Energy Industry

UAE to spend $70bn to boost capacity

Oil rigs12 November 2013, News Wires – Abu Dhabi National Oil Company (ADNOC) is set to spend more than $70 billion over the next five years to increase its crude production capacity, according to Suhail Mohammed Al Mazroui, Minister of Energy for the United Arab of Emirates (UAE).

Speaking on a panel at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) Sunday, Al Mazroui said that the ongoing projects will boost production capacity to more than 3.5 million barrels per day by 2018.

During his opening address to some of the world’s most important energy leaders, Al Mazroui said: “ADIPEC 2013 is an outstanding forum to directly discuss pressing issues facing the all-important oil and gas industry. As one of the major producers in the world, the UAE and Abu Dhabi continue to lead the way as a global hub for technology and innovation. Important changes are taking place as part of the shifting energy balance: the UAE has decided to be part and embrace this change, while remaining a reliable source and supplier of hydrocarbon to the world.”

Speaking during the Ministers panel, which followed the opening session, the UAE energy minister said that his country is also planning to diversify its energy resources where nuclear energy will account of 25 percent of the total energy mix, while renewable accounts for 7 percent and gas represents 70 percent of the total energy mix.

Al Mazroui also blamed low and subsidy energy prices in the UAE and in all other Gulf Cooperation Council (GCC) countries for the excess energy consumption in the country.

“Consumers in the UAE are wasting energy because of the low cost,” he said.

Dr. Mohammad Bin Hammad Al Rumhy, Oman’s Minister of Oil & Gas, also echoed Al Mazroui’s comments. The two ministers were speaking during the Ministers panel, which also included Dr. M Veerappa Moily, Honorable Minister of Petroleum and Natural Gas, India and Hon Gregory Barker, Member of Parliament, Minister of State, Department of Energy and Climate Change, United Kingdom.

Al Rumhy said that as consumption increased the consumers in the Gulf were taking advantage of the government subsidies noting that too often people in the GCC will unnecessarily opt for vehicles that have big engines and are not fuel efficient. But Al Rumhy went one step further than Mazroui and said that the price of oil had to be increased for local consumers.

“What is really destroying us right now is subsidies … We simply need to raise the price of petrol and electricity. In some countries in our region electricity is free and you leave your air conditioning for the whole summer when you go on holiday. That is really a crime,” he said.

“Our cars are getting bigger, our consumption is getting bigger and the price is almost free. So you need to send a signal to the pockets of the public.”

Meanwhile, Ali Rashid Al-Jarwan, chief executive officer of Abu Dhabi Marine Operating Company (ADMA-OPCO), said that ongoing projects in Abu Dhabi are on track.

“As a subsidiary of the Abu Dhabi National Oil Company (ADNOC), Abu Dhabi Marine Operating Company (ADMA-OPCO) is part of the on-going efforts to increase our oil production capacity by 35 percent to 3.5 million bopd by 2018 from current 2.7 million bopd,” Al-Jarwan said.

This production’s target is set to be achieved through three major subsidiaries of ADNOC including ADMA-OPCO, Abu Dhabi Company for Onshore Oil Operations (ADCO) and Zakum Development Company (ZADCO).

“For ADMA-OPCO, we are planning to increase our production by 370,000 bopd from current production level which stands at about 550,000 to 600,000 bopd. The new production target is set to be achieved mainly from Lower Zakum Field with 100,000 bopd and 270,000 bopd from Umm Lulu, Satah Al-Razboot (SARB) and Nasr fields,” he said. “Added to the Umm Shaif production share which currently stands at 275,000 bopd and Zakum production of 325,000 BPD, we are targeting a total production of 1 million bopd by 2020.”

Speaking about the progress of the ongoing projects, Al-Jarwan said that the phase I of Umm Lulu and Nasr fields represent early production scheme to assess the reservoir behavior, however, the company is already now moving to the full field development of Umm Lulu.

“We awarded two packages, the first package consists of seven towers and flow lines and pipeline to Zarku Island to join SARB, and for SARB the company is moving to a full field development to produce 100,000 BOPD, and all seven EPC packages area warded.”

For the full development of SARB oilfield, ADMA OPCO have selected the construction of two artificial islands, SARB-1 and SARB-2, which have been falcon-shaped and are currently under construction by ADNOC Civil projects Division. The locations of the islands are some 75 miles (120 kilometers) to the northwest coast of Abu Dhabi.

The Onshore Facilities engineering, procurement and construction (EPC) work undertaken by Hyundai EC covers processing, storage and export facilities on Zirku Island and wellhead facilities on two Artificial Islands. Meanwhile, the offshore works undertaken by Petrofac mainly include around 124 miles (200 kilometers) of subsea pipelines, 34 miles (55 kilometers) of subsea cables, a Single Point Mooring Crude Loading Facility, four offshore flares and two riser platforms in addition to drilling utilities on the Artificial Islands.

ADMA-OPCO is planning to commission and start production from Umm Lulu Field by the end of 2017.

– Rigzone

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